Today, over half of the world’s equity value is located outside the United States. This means that substantial investment opportunities are located in non-U.S. markets. In any given year, a number of non-U.S. markets generally outperform the U.S. market. Therefore, greater numbers of U.S. investors are placing assets in overseas markets.
Our International Small Cap Equity Portfolio applies a Graham & Dodd value approach to stock selection. Generally, a security will be bought if it is trading below what we believe to be its intrinsic value. This conservative approach strives to provide investors with a margin of safety. We believe that proper analysis can uncover good values anywhere in the world, thereby significantly expanding the number and scope of investment opportunities.
For long-term investors, smaller-cap stocks have historically offered greater returns than larger-cap stocks in international markets. However, markets for small-cap securities may be more volatile and less liquid than those for larger companies. Also, investing internationally involves unique risks, including the potential for political, economic, and currency instability. Investors should carefully consider these risks in the context of their overall objective, time horizon, and asset allocation prior to investing.
For a more complete description and discussion of applicable risks, consult Brandes' Form ADV, Part 2A.